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Ofgem announces latest energy price cap

While the cap rates set a maximum charge per unit of energy, overall cost will still be influenced by the amount of energy used and type of heating system.

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It has been announced today that households in England, Scotland and Wales will see a reduction in the price cap applied to their gas and electricity bills with the annual estimate for a typical dual fuel customer paying by direct debit expected to reach £2,074 from July. This compares to the rate of £3,280 in April and £4,279 earlier in the year.  

Households have previously received support from the UK Government through the Energy Price Guarantee and the Energy Bills Support Scheme which has provided some protection against the price hikes in the wholesale market. However, these schemes will no longer apply meaning that from July average bills will remain similar to current levels for most households. The new cap rate also remains considerably higher that the pre-2021 rates and Ofgem acknowledge that many households will still find this difficult to afford.  

While the cap rates set a maximum charge per unit of energy, overall cost will still be influenced by the amount of energy used and type of heating system. Those with electric heating for example will face even higher average bills due to the high cost of electricity compared to gas. The cap also applies to domestic contracts only meaning those with communal heating systems will not be subject to this new rate. Non-domestic contracts can however receive additional support through the Energy Bills Discount Scheme which runs until March 2024.    

The Scottish Government has been providing additional support to households as part of the Fuel Insecurity Support Fund, including the Social Housing Fuel Support Fund for social housing tenants. Further details on this fund and how to apply for Phase 1 can be found here.  

Ofgem’s full press release on the new price cap period for 1 July to 30 September 2023 is also available here: https://www.ofgem.gov.uk/publications/customers-pay-less-energy-bills-summer  

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